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How to Balance the Parts Department Checkbook

Featuring Rob Campbell

Original Air Date: February 23, 2017


How to make the Parts DMS inventory Jive with the General Ledger!

It's no secret that when it comes to the Parts Department, the dealership runs two sets of books. One set is kept and controlled by the Parts Manager and is geared toward inventory management… keeping the right parts on the shelves to satisfy the Service Department's needs, and avoiding obsolescence. It's mostly about the physical parts themselves.

The other set of books is kept and controlled by Accounting. The General Ledger is the financial blueprint for the enterprise, but in this instance it is primarily concerned with the dollar value of the parts department's assets and liabilities. It is mostly about the dollar value of the investment.

Problem: On the surface they seldom agree. Sometimes that simply means that the process of adding to and subtracting from those figures, is different for each concern.

But sometimes, the imbalance can point to very real problems and potential losses. So like balancing your checkbook, you need to isolate the differences and reconcile regularly.

This workshop is an in-depth look at strategies to help balance the 2 sets of books, and/or identify problems needing solutions.

You will learn:

  • Primary causes for inventory valuation disputes between Parts and Accounting
  • Strategies for identifying and "balancing" reasonable and routine differences
  • How the 2 sets of books can help hide serious problems and potential losses
  • Solutions for inventory shortages and overages.
  • How Parts & Accounting can work together to balance the 2 sets of books

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